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# The recent upheaval in the office-equipment retail business,

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Eternal Intern
Joined: 07 Jun 2003
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Updated on: 25 Jul 2003, 05:50
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75% (hard)

Question Stats:

56% (02:07) correct 44% (02:14) wrong based on 684 sessions

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The recent upheaval in the office-equipment retail business, in which many small firms have gone out of business, has been attributed to the advent of office equipment superstores whose high sales volume keeps their prices low. This analysis is flawed, however, since even today the superstores control a very small share of the retail market.

Which of the following, if true, would most weaken the argument that the analysis is flawed?

(A) Most of the larger customers for office equipment purchase under contract directly from manufacturers and thus do not participate in the retail market.

(B) The superstores’ heavy advertising of their low prices has forced prices down throughout the retail market for office supplies.

(C) Some of the superstores that only recently opened have themselves gone out of business.

(D) Most of the office equipment superstores are owned by large retailing chains that also own stores selling other types of goods.

(E) The growing importance of computers in most offices has changed the kind of office equipment retailers must stock.

Originally posted by Curly05 on 24 Jul 2003, 12:44.
Last edited by Curly05 on 25 Jul 2003, 05:50, edited 1 time in total.
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03 Jan 2018, 17:38
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hazelnut wrote:
GMATNinja, Could you help to explain why (A) is wrong?

The analysis in question is:

• The recent upheaval in the office-equipment retail business can be attributed to the advent of office equipment superstores, whose high sales volume keeps their prices low.
• Many small firms have gone out of business because of this upheaval.

The author argues that this analysis is flawed. Why? Because "even today the superstores control a very small share of the retail market." Choice (A) might help explain WHY superstores control only a very small share of the retail market, but it does not weaken the author's argument.

The author basically says, "How could it be true that superstores have caused the upheaval if superstores only control a very small share of the retail market?" Choice (B) answers that question. The superstores might only control a very small share, but their heavy advertising has forced prices down throughout the retail market for office supplies. Even without a large market share, the superstores have had an effect on the entire market (an effect that would likely put several small firms out of business).

This strengthens the analysis in question and thus weakens the author's argument.
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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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24 Jul 2003, 13:52
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I think B is correct.

The story is:
Little guys are out of business because of low prices. And it's the big guys' fault because they sell high volumes.

The argument:
Big guys are not responsible for low prices because they have a small share of the market.

We are supposed to find something that weakens the argument (in favor of the story).

B) Big guys keep prices down because of the advertising, whether or not they sell a lot.
##### General Discussion
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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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24 Jul 2003, 13:21
I like (A)

The arguement is based on the assumption that the large stores are putting the little guys out of business by controlling the retail market.
However, (A) states that they are keeping their sales volume high and prices low by selling outside of the retail market.

Thus, the reasoning that big stores are not putting the little guys out of business based on the evidence that they are not controlling a large share of the retail market is flawed, since there are other ways to keep volume high outside of the retail market.
Eternal Intern
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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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24 Jul 2003, 15:02
1
Can we attack the assumption of argument?

Small stores have been able to keep prices high.

Now, they can't because of Staples Advertising.

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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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24 Jul 2003, 22:21
2
Pay attention to the conclusion we have to attack.

This analysis is FLAWED, however, since even today the superstores
control a very small share of the retail market.

Since we need to prove it weak, we have to show that this analysis is NOT FLAWED, but correct instead.

The recent upheaval in retail business IS REALLY CAUSED BY the advent of office equipment “superstores”.

(B) seems to do the best job.
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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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14 Aug 2006, 23:24
1
Taking (B) over A here because we have no idea how much of the total market share is occupied by the larger consumers.
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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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15 Aug 2006, 11:17
B attacks the conclusion (that big players are not the culprits because they own a relatively small share of the market) by saying the big guys have created a downward thrust on the prices due to aggro advertising that the smaller fries can't catch up with.
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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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15 Aug 2006, 11:40
1
I go with "B"

The question is tricky.
the argument is based on LOW prices are responsible for ...., but if "B" is true, the argument is still strue, but it weakens the reasoning on which it is based on because now there is an additional reason to support the argument and so the initial reasoning "LOW prices are responsible for ..." is weakened.
This is a good example of weaking an argument by providing a stronger strong argument.

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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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15 Aug 2006, 19:45
Go with A, because it says most of the big contacts does not come to either shops or supermarkets. Total market size is small and supermarkets hold major part of that. i.e. Lets assume.

60% Contarcts out of market.
30% Supermarkets
10% Small shops.

If 60 percent is out, then supermarkets hold 75% of market share and are in good position to change the market pricing.
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Updated on: 05 Jun 2017, 07:26
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The recent upheaval in the office-equipment retail business, in which many small firms have gone out of business, has been attributed to the advent of office equipment “superstores” whose high sales volume keeps their prices low. This analysis is flawed, however, since even today the superstores control a very small share of the retail market.

Which of the following, if true, would most weaken the argument that the analysis is flawed?

(A) Most of the larger customers for office equipment purchase under contract directly from manufacturers and thus do not participate in the retail market.
(B) The superstores’ heavy advertising of their low prices has forced prices down throughout the retail market for office supplies.
(C) Some of the superstores that only recently opened have themselves gone out of business.
(D) Most of the office equipment superstores are owned by large retailing chains that also own stores selling other types of goods.
(E) The growing importance of computers in most offices has changed the kind of office equipment retailers must stock.

My Answer was 'D' (later i realized that it is wrong) Correct Answer is 'B'
According to 'B' Heavy advertising by superstores has made the furniture prices to go down. if this is true then superstore's market share must be substantial which is contradicting Premise 3 since even today the superstores control a very small share of the retail market. because according to Premise 1 The recent upheaval in the office-equipment retail business, in which many small firms have gone out of business small firms have already gone out of buisness.
In CR - as per my knowledge - we are not allowed to refute the premise while weakening the argument.
Pls Explain!
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Originally posted by Narenn on 01 Jan 2013, 11:07.
Last edited by carcass on 05 Jun 2017, 07:26, edited 1 time in total.
Edited the question
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01 Jan 2013, 11:50
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B says that superstore have huge ad for the publicity. So have lower price, so is not the control of retailer the reason but the aggressive strategy

rules-for-posting-in-verbal-gmat-forum-134642.html

Thanks.
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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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02 Dec 2013, 07:06
Oh Man!!!! Now I got what the correct answer is all about. B is saying that as the retail prices have gone down all over the market small firms are unable to sustain because of less profitability. Hence the analysis is not flawed. got a headache trying to solve this one.
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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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03 May 2016, 04:09
1
The recent upheaval in the office-equipment retail
business, in which many small firms have gone out
office equipment тАЬsuperstoresтАЭ whose high sales
volume keeps their prices low. This analysis is
flawed, however, since even today the superstores
control a very small share of the retail market.

Which of the following, if true, would most weaken
the argument that the analysis is flawed?
(A) Most of the larger customers for office
equipment purchase under contract directly
from manufacturers and thus do not participate
in the retail market.
(B) The superstoresтАЩ heavy advertising of their low
prices has forced prices down throughout the
retail market for office supplies.
(C) Some of the superstores that only recently
opened have themselves gone out of business.
(D) Most of the office equipment superstores are
owned by large retailing chains that also own
stores selling other types of goods.
(E) The growing importance of computers in most
offices has changed the kind of office
equipment retailers must stock.

Conclusion : Superstores are not responsible for putting small stores out of business.
Evidence : Superstores control a very small piece of shares.

So deducing the logical gap between conclusion and evidence, the Assumption is that :
Shares in the market is the only reason why small businesses are being affected. To attack this question, we need to find some other reason for which stores could be going out of business

Only B fits.
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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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28 Jul 2016, 09:35
1
Curly05 wrote:
The recent upheaval in the office-equipment retail business, in which many small firms have gone out of business, has been attributed to the advent of office equipment superstores whose high sales volume keeps their prices low. This analysis is flawed, however, since even today the superstores control a very small share of the retail market.

Which of the following, if true, would most weaken the argument that the analysis is flawed?

(A) Most of the larger customers for office equipment purchase under contract directly from manufacturers and thus do not participate in the retail market.

(B) The superstoresтАЩ heavy advertising of their low prices has forced prices down throughout the retail market for office supplies.

(C) Some of the superstores that only recently opened have themselves gone out of business.

(D) Most of the office equipment superstores are owned by large retailing chains that also own stores selling other types of goods.

(E) The growing importance of computers in most offices has changed the kind of office equipment retailers must stock.

Conclusion:- The analysis is flawed.

What is the analysis:- Superstore's low price strategy is the reason for closure of small stores.

Weaken the conclusion means we have to show that SS is responsible for closure of small stores.

possible reasons:-
1) There is no customer loyalty under this category. Whoever offers cheap items gets the most customers.
2) Small stores are unable to offer the same or lower price.
3) Although market share of SS is low, but split of remaining market share is even lower among other competitors and likely to decrease in future.
4) There is none other than price that is causing this effect to happen in retail- market.

(A) Most of the larger customers for office equipment purchase under contract directly from manufacturers and thus do not participate in the retail market. They DO NOT participate in the market we are concerned about.

(B) The superstoresт heavy advertising of their low prices has forced prices down throughout the retail market for office supplies. Possible reason.

(C) Some of the superstores that only recently opened have themselves gone out of business. We want to show why small stores are not in business any more.

(D) Most of the office equipment superstores are owned by large retailing chains that also own stores selling other types of goods. We are not concerned about other types of goods.

(E) The growing importance of computers in most offices has changed the kind of office equipment retailers must stock. are those equipment only with Superstores? Not sure.
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Re: The recent upheaval in the office-equipment retail business, in which  [#permalink]

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27 Mar 2017, 21:33
IMO B _
1) Argument P - SuperStores are selling for low prices - causing small stores quit.
C - But this is flawed analysis
C P- SuperStores has less market.

A - Does nothing
B - The conclusion "This is flawed analysis" is weakend - by saying SuperStores forced other stores also to lower the prices causing them harm.

Only B is correct.
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05 Jun 2017, 06:45
carcass wrote:
B says that superstore have huge ad for the publicity. So have lower price, so is not the control of retailer the reason but the aggressive strategy

http://gmatclub.com/forum/rules-for-pos ... 34642.html

Thanks.

Hi Carcass,

Kindly help to explain in detail why b is the answer.

We have to prove that analysis is not wrong. And high sales volumes indeed led to their low.

Unable to make anything out of it.
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05 Jun 2017, 07:35
Top Contributor
This is a business law & economies of scale: more quantities sold permit you to cut the costs and being more competitive.

If you are so strong to low the prices in a systemic way, which means throughout the entire distribution chain. This means you are strong enough to lead the market. So B is the answer.

A real example could be Ikea.

Hope this helps.

Regards
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18 Dec 2017, 22:37
GMATNinja, Could you help to explain why (A) is wrong?
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19 Dec 2017, 09:00
1
hazelnut wrote:
GMATNinja, Could you help to explain why (A) is wrong?

Curly05 Notice we aren't asked to weaken the claim that the analysis is flawed, we are asked to weaken the specific claim given for why this is so (since the superstores control a small share, they can't be the reason that small firms go out of business). (A) doesn't relate to this claim at all, and thus it is irrelevant.
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Re: The recent upheaval in the office-equipment retail business, &nbs [#permalink] 19 Dec 2017, 09:00

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